While ATMs have become one of the most popular ways to take out cash in a foreign country, exchanging money still makes sense for some travelers. ATMs can be unreliable, you may want to carry a small amount of backup cash, or you may just have funds left unspent when you move from one country to another. Whatever your reasons may be, keep the following in mind when exchanging money for a trip to a foreign country.
– Watch out for “no-fee” exchangers. Many shops that exchange foreign currency advertise themselves as “no-fee,” but those businesses often end up being among the most expensive places to exchange currency anyway. Typically, they increase their exchange rates in lieu of directly charging fees, which can be particularly expensive if you’re exchanging a large sum. Keep an eye on interbank exchange rates on the Internet and make sure you’re not paying too much of a premium over them.
– Avoid direct exchanges on credit-card purchases. While a credit-card purchase doesn’t involve exchanging cash, it can still be a place you get dinged on the exchange rate. Some stores will offer to convert your purchase directly into U.S. dollars. If they do, politely decline. You almost always end up paying more in hidden fees and higher exchange rates when you select that option.
– Consider exchanging cash at your bank ahead of time. If all you need is some emergency cash, or if you plan to bring all your cash with you when you leave, you may want to exchange cash at your bank before your trip. You can often get a better rate this way than you would by exchanging on the road, and while some banks charge fees in relation to foreign exchange, they may waive them for you if you’ve been a good customer.
– Avoid exchange desks in popular tourist locations. Many airports, hotels, and city center have a foreign-exchange desk where you can swap cash. The desks may be convenient, but you pay for it. The fees charged at these types of locations can be as high as 20 percent, meaning you’re almost always better off exchanging somewhere else.
